CleanSpark Inc. CLSK said on Monday that much of its shareholder value will come from investing in mining facilities rather than adding BTC/USD to its balance sheet.
What Happened: During the company's fourth-quarter earnings call, CEO Zach Bradford said that while the company is not opposed to direct Bitcoin purchases, He said he believes the gains will come from acquiring or building a bitcoin production facility.
Bradford said the company is producing Bitcoin at healthy profit margins, reducing the average cost-based value of its hidden assets.
“So, in fact, the way we see it, you are forced to make a decision about whether you want to buy an asset to produce Bitcoin on a regular basis, or how much better at this point than 50% margin over the spot price? Or are you going to buy Bitcoin?'' said the company's top executive.
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Bradford suggested that CleanSpark's strategy provides a competitive edge because miners that are buying Bitcoin are either losing money or operating with very low profit margins.
Why it matters: As of this writing, CleanSpark is the seventh largest corporate holder of Bitcoin, with 8,701 BTC worth $836.96 million at current market prices, according to data from bitcointreasuries.net. I have it hidden.
The Bitcoin strategy popularized by MicroStrategy Inc. MSTR first caught up with Wall Street as companies turned to a variety of corporate strategies to add the leading cryptocurrency to their balance sheets.
Leading Bitcoin miner MARA Holdings Inc. MARA has announced a private placement of $700 million in interest-free convertible notes, the proceeds of which will be used to fund future Bitcoin purchases.
Meanwhile, CleanSpark's total revenue increased 125% on a year-over-year basis, despite missing estimates, as revealed in its fourth quarter earnings report.
Price Action: CleanSpark stock rose 1.18% to $14.52 on Monday and was down 3.58% in after-hours trading, according to Benzinga Pro.
The stock's consensus price target, based on the opinions of eight analysts, was $19.23. The highest price was $27 issued by HC Wainwright & Co. on September 25, 2024. The lowest price is $5.3 issued by Bernstein on October 31, 2023.
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